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Bull of the Day: Zebra Technologies Corporation (ZBRA)


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Shares of Zebra Technologies Corporation (ZBRA) have surged 27% this year, and the company's tracking technology looks poised to grow as part of the broader Internet of Things expansion.

Overview & Recent News

Zebra Technologies sells tablets, barcode scanners, RFID products, location-tracking tech, and many other hardware offerings to a variety of industries, including healthcare, retail, transportation, and manufacturing. The Lincolnshire, Illinois-based firm refers to itself as an enterprise asset intelligence company and aims to help its customers track and manage inventory, streamline supply chains, and much more.

The firm boasts over 10,000 clients around the globe and seems set to expand as more and more firms and industries dive headfirst into IoT and cloud computing, in our increasingly mobile world. Zebra Technologies last week completed its purchase of Temptime Corporation for an undisclosed amount. The privately held firm sells temperature-tracking devices, offering on-demand mobile solutions that help companies monitor pharmaceuticals, medical devices, vaccines, and more.

Zebra Technologies stock closed regular trading Wednesday down slightly to $202.48 a share. Still, as we mentioned at the top, shares of ZBRA have surged roughly 27% in 2019 and currently sit just below their recently reached 52-week high of $207.88 per share.

Outlook & Earnings Trends

Zebra Technologies is coming off a fourth quarter that saw its revenues pop 10.8% to reach $1.14 billion, which topped our estimate. More specifically, the company's larger "Enterprise Visibility & Mobility" unit jumped over 14%, while its smaller "Asset Intelligence & Tracking" segment climbed roughly 4.5% to reach $367 million.

Looking ahead, the company's Q1 fiscal 2019 revenues are projected to climb 7.61% to reach $1.05 billion, based on our current Zacks Consensus Estimate. Meanwhile, the company's top-line is projected to expand by 6% in 2019 to come in at $4.47 billion. This would represent slower growth than Q4 and fiscal 2018's 13.3% overall revenue jump. But the current projections could change based on its Temptime Corporation acquisition and no matter what they mark solid growth on top of an impressive year for the firm that was founded in 1969.

At the bottom end of the income statement, Zebra Technologies' growth is expected to come in at a higher clip. ZBRA's current quarter EPS figure is projected to jump over 12.1% to touch $2.87 a share. Plus, the company's adjusted Q2 earnings are expected to surge nearly 17%, with its full-year earnings projected to climb 13.35%. We should note that the company's expected double-digit fiscal 2019 EPS growth would come on top of 2018's 56% bottom-line expansion.

Furthermore, Zebra Technologies' earnings estimate revision activity has trended completely in the right direction recently, as the chart below shows. This is important because it has been proven tha t earnings growth leads to positive stock price movement over the long haul, and clearly at least some analysts are more bullish on the company's earnings outlook. Zebra Technologies has also surpassed our EPS estimates in the trailing four quarters.

Bottom Line

Zebra Technologies is a Zacks Rank #1 (Strong Buy) at the moment that rocks an "A" grade for Growth in our Style Scores system. The company is also in the Manufacturing - Thermal Products industry, which ranks in the top 7% of our 256 industries. This could help the firm continue to climb as stocks in hot industries have a better chance of climbing as part of larger momentum.

Let's also not discount just how popular the IoT industry is at the moment, with more growth projected to come as everyone from Microsoft (MSFT) to Amazon (AMZN) try to deepen their footprints in the market. Zebra Technologies is also trading below its industry's average P/E of 16.8 at 16.53.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Investing , Investing Ideas , Stocks
Referenced Symbols: ZBRA , MSFT , AMZN




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